According to data published on Thursday by the government, Argentina’s poverty level jumped to 53% during the first six months of 2024. This is a dramatic increase from 41.7% at the end 2023.
The President Javier Milei’s austerity efforts have had an immediate impact on the economy.
Milei’s policies are intended to stabilize Argentina’s finances. However, the short-term effects have been significant, particularly for low-income families, since inflation is still in triple-digits, and there’s an economic recession.
Milei’s economic reforms
Official figures reveal that Argentina’s poverty level has increased from 26 percent to more than twice as much in the last seven years, highlighting the serious consequences of economic crisis.
Investors have welcomed Milei’s reforms in fiscal policy, which include deep cuts to spending, for their contribution in correcting the longstanding imbalance of the budget. However, there has been a heavy human cost.
This sharp increase in poverty is a reflection of the impact these policies have on those who are most at risk, and it exacerbates inequality.
In order to cut public spending the libertarian’s president has weakened many safety nets.
Many families are struggling with basic needs due to job losses, reduced welfare benefits and other factors.
Poverty is on the rise due to inflationary pressures and economic recession
Argentina’s economic situation remains bleak, and inflation continues to be at triple-digit rates, although there are some early signs that the economy is stabilising.
The cost of living is soaring despite the government’s efforts to curb inflation. This has led to an increase in poverty.
Even those with jobs are struggling to survive as their wages do not keep up with the price increases.
Informal workers are one of the groups most affected by this decline in income.
Irma Casal, a resident of Buenos Aires aged 53, is a symbol for this increasing economic difficulty.
She can’t even support herself with three jobs: recycling garbage, collecting cartons, and bricklaying.
Casal sums up the plight millions of Argentines by saying, “We have to work twice as much for less.”
Reforms are praised by the markets, but they cost public money
Investors and the financial markets have praised Milei’s austerity policies despite their severe effects on the everyday Argentine.
Fiscal discipline by his government is seen as an important step in addressing Argentina’s deficit problem.
The markets have shown positive reactions to budget cuts by the government, which aim to restructure Argentina’s finances in order to make it more appealing to foreign investors.
The recession and the ongoing inflation has made it obvious that Argentina’s middle and lower classes are bearing the brunt of the reforms introduced by Milei.
Some critics argue that, while markets might benefit from reforms like these, the average citizen is left with declining incomes and limited upward mobility.
There are signs of improvement, but poverty is still high
Some experts are hopeful despite the grim statistics.
According to the Catholic University of Argentina, the rate of poverty rose to 55.5% during the first quarter of 2020, but then dropped to 49.4% by the second, and averaged around 52% in the first half of 2019.
Agustin Salavia, the director of UCA’s observatory noted that Milei’s policies are beginning to have some positive results, as poverty has begun to decrease in recent years.
Overall, the situation remains grim. The government cut some welfare programs while increasing others. These include the Universal Child Allowance, and Food Card Initiative.
The targeted interventions are a partial relief but not enough to compensate for the overall impact of spending cuts.
Milei’s economic plan for Argentina: Long-term outlook
Milei’s long-term economic success is still uncertain.
Manuel Adorni, the presidential spokesperson at a recent press conference, said that any level of poverty was horrendous.
Adorni blamed previous administrations’ mismanagement for the “bombs” that Milei’s government now attempts to defuse.
Despite government efforts to reduce the effects of austerity for Argentina’s most vulnerable citizens, millions of Argentines still face a difficult future.
Many hope that short-term pains will lead to long-term stability in the economy, but the poverty rate is still rising as Milei struggles with balancing social welfare and fiscal discipline.
As new information becomes available, this post Argentina’s poverty rises to 53% under Milei’s austerity may be updated.
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